Ralliant Posts Accelerating Growth, Raises Full-Year Guidance Again
Ralliant (RAL) reported second-quarter revenue of $568 million, up 13% from a year earlier, as both operating segments returned to double-digit growth and net earnings margin swung from contraction to expansion.
Ralliant (RAL) reported second-quarter revenue of $568 million, up 13% year over year, with growth in both its Sensors & Safety Systems and Test & Measurement segments accelerating from the prior quarter. The industrial technology company posted 11% revenue growth in Sensors & Safety Systems and 15% in Test & Measurement, building on first-quarter revenue of $535 million that had risen 11%.
The quarter marked a reversal in Ralliant's margin trajectory. Net earnings margin expanded 60 basis points year over year to 10.1% in the second quarter, following a 500-basis-point decline to 8.3% in the first quarter. Adjusted EBITDA margin rose to 19.8% from 18.6% sequentially, and on a normalized basis, year-over-year margin expansion widened to 390 basis points from 270 basis points in the prior quarter. Diluted earnings per share rose to $0.51 from $0.39 in the first quarter, while adjusted EPS climbed to $0.68 from $0.57.
The swing was driven in large part by Test & Measurement, which posted an operating profit of $5 million and a 2.4% operating margin, up 980 basis points from a year earlier, after recording a $3 million operating loss in the first quarter. Segment adjusted EBITDA margin rose to 14.7% from 11.9% sequentially, extending a recovery Ralliant had already flagged entering the year as three consecutive quarters of sequential improvement.
Sensors & Safety Systems followed a different path to the same result. Operating margin in that segment had declined 240 basis points year over year in the first quarter to 27.3%, which the company attributed to higher employee costs, before expanding 290 basis points to 28.4% in the second quarter on operating leverage, pricing and productivity savings.
Ralliant raised its full-year 2026 guidance for the second consecutive quarter, now projecting revenue of $2.250 billion to $2.300 billion and adjusted EPS of $2.76 to $2.90, building on a first-quarter guide that had itself already been raised from Ralliant's original outlook. The company also guided Corporate & Other costs to roughly $20 million to $23 million per quarter in the second half of the year, a new disclosure tied to stand-up costs for its Enterprise Productivity Program and a shift of some general and administrative expense out of the segments and into corporate.
Ralliant's balance sheet shifted materially during the quarter. The current portion of long-term debt fell to zero from $530.4 million at the end of 2025, while long-term debt rose to $1,148.5 million from $618.4 million, and the company recorded $13.8 million in net interest expense compared with none in the prior-year quarter — the result of refinancing and debt reclassification that added new leverage costs.
Ralliant returned $161 million to shareholders year to date, including the completion of a $100 million accelerated share repurchase program that fully settled in the second quarter. The Q1 release described that ASR only as expected, under a repurchase authorization raised to $500 million. Trailing-twelve-month free cash flow rose to $328 million from $303 million, and operating cash flow rose to $365 million from $345 million.